Virginia taxes cigarets at 30 cents a pack. In New York, cigaret taxes total $5.85 a pack. It doesn’t take a criminal mastermind to see an opportunity here: you could make $1 million just by buying a truckload of smokes in Virginia and selling them in New York. Of course, doing that would be highly illegal, and that is just how Basel and Samir Ramadan ended up with millions of dollars in plastic garbage bags stashed all over their Maryland home, and the cops at their door.
Police in New York City, New Jersey, and Delaware busted the brothers’ alleged smuggling ring in May. According to news reports, the operation purchased about 20,000 cigarets a day from a wholesaler in Virginia, hid them in a storage facility in Delaware, then drove them to New York, where they were eventually sold to unsuspecting customers at Arab newsstands and grocery stores. Police say some of the profits were funneled to Palestinian terrorist groups.
This is the kind of operation that Mike Shaw is helping to stop. Shaw is the founder and president of Code Tech, a Lawrenceville-based company that uses common household inkjet cartridges to print anti-counterfeiting labels for drugs and cigarets. From his small office on Princess Road, Shaw develops and ships ink cartridges that are filled with ink that looks black to the naked eye, but shimmers with different colors under ultraviolet or infrared light.
The other innovation of Code Tech is the way the ink cartridges are used. In a household desktop printer, a print head moves the ink cartridge back and forth along a piece of paper, printing images and letters as it goes. Shaw’s company used these household print cartridges in industrial label-making machinery.
This was the focus of Shaw’s previous company, called Nutec Systems Inc. Nutec licensed the printer cartridge technology from Hewlett-Packard and developed the labeling system that is now used for special anti-counterfeiting labels. Nutec is still in business at 3175 Princeton Pike in Lawrenceville.
Shaw, who left Nutec and founded Code Tech so he could focus on anti-counterfeiting measures, found that manufacturers liked using ink cartridge technology for the same reasons that many consumers dislike them. “This became attractive to manufacturing companies because there is no maintenance associated with a sealed cartridge. You can’t work on it: it’s a self-contained disposable cartridge,” he says. The self-contained nature of the ink cartridge also allows companies to charge extremely high prices for printer ink, as anyone with a desktop printer knows all too well. However, Shaw was able to tune the efficiency of the cartridges so that each cartridge can print about 600,000 labels.
How is Code Tech able to get miles of text out of an ink cartridge when yours runs out after a few pages? It’s all about efficiency. First, a normal household printer is dormant most of the time and is shut down and restarted every time a user wants to print something. Each time a printer is booted up, it goes through a cleaning cycle that wastes tremendous amounts of ink. Manufacturers don’t have that problem since they run continuously.
Second, pictures are the biggest ink-wasting culprits, and Shaw’s system prints only text. Last, all of the labels are printed in Courier font, which, with its skinny strokes, uses about half the ink of the more common Arial.
After developing the printing system, Shaw realized he could do more with it than just printing text. “As time progressed, we realized these companies were having big problems with counterfeiting,” he says. “We developed inks that incorporate various chemical taggants that go into the cartridges. They’re covert taggants.”
As Shaw explains, the methods he uses are similar to those used by the treasury department when it prints currency. An American bill has about 20 anti-counterfeiting features. Some, like the threaded foil and color-shifting ink, are obvious to consumers. These are called “overt” security features. Others are visible only to investigators using special equipment. These are called “covert” features. Shaw’s ink is the latter.
Shaw’s two main anti-counterfeiting taggants use opposite ends of the light spectrum. The human eye can see colors within a certain spectrum. Light with wavelengths shorter than this spectrum is called “ultraviolet,” and light with longer wavelengths is called “infrared.” Shaw’s ultraviolet taggant is normally invisible to the naked eye, but emits visible, colored light when hit with UV rays. If you hit it with a common UV “blacklight,” it’s still invisible, because it uses certain frequencies not found in commercial blacklights. “It’s not a wavelength you’d find at a nightclub or Chucky Cheese,” he says.
The infrared taggants reflect light. That means you can only see them with an infrared viewer. The labels are coded with serial numbers, batch numbers or other information totaling up to 178 alphanumeric characters. The codes can be read with a common smartphone barcode reader. But if you read it with Code Tech’s special app, secret information is revealed, such as what the manufacturer’s intended distribution channel is. Someone with the Code Tech app could, for example, scan a pack of black market cigarets and tell that they had been smuggled far from their intended point of sale.
“So it has three features in one,” Shaw says. “An overt data carrier, a covert data carrier, and a taggant. That’s the uniqueness of what we’re doing here.”
Shaw was able to create this system, and the anti-counterfeiting taggants, despite not having a background in chemistry or photonics. Shaw grew up in Baltimore, where his mother was a travel agent and his father worked in packaging for a company called Signcode. He studied business administration at the University of Maryland. Shaw says he picked up his knowledge of optics through “osmosis” by spending time with Princeton professors and experts in the anti-counterfeiting field after he started his labeling company. Part of the technology used in Code Tech’s system is licensed from photonics researchers at Princeton.
Shaw says his clients prefer him not to disclose who they are. Among them are major tobacco and pharmaceutical companies. Of course, Code Tech is not the only player in the emerging anti-counterfeiting field. Shaw says his four-employee company is one of the smallest doing this kind of work, and that actually turns out to be quite an advantage. Code Tech keeps its staff small because much of the work of actually making the taggants is done by a contractor off-site in labs in Pennsylvania. Shaw says a pharmaceutical executive once told him: “The other companies that are doing this have hundreds of people who know what they’re providing. With you, there’s only three people in the world that know what you’re doing. You, me, and your chemist.”
Sometimes, being small is an advantage. Shaw says Code Tech takes in about $3 million a year. Not as much as one would make smuggling cigarets, but also not bad for a tiny staff.
He is also using his knowledge of photonics to branch out into other fields. His latest project is creating secure ink that uses the “Raman effect” for identification. Raman scattering was discovered in 1928 and has to do with the way light scatters in predictable ways off of certain molecules, in certain patterns. This effect has never been used for anti-counterfeiting, however, because it was too impractical to read the patterns.
Shaw, holding up a small handheld scanner, says the Raman effect could be used to create a very robust, if not unbreakable code. “It’s only since the miniaturization of electronics that this has been possible,” he says, holding up a handheld scanner. “Fifteen years ago, this device would have been the size of this room.”
He is also looking for other applications of optics technology. One involves adding taggants to machine oil used to lubricate manufacturing equipment. One major cigaret company is already using this to detect cigarets that have been contaminated with machine oil and automatically remove them from the production line.
Although safe cigarets may seem like something of an oxymoron, Code Tech is also at work combating fake pharmaceutical drugs. He says his technology was recently used to detect and destroy a counterfeiting ring that was putting fake cancer drugs on the market. It’s a line of work that Shaw finds very rewarding. “I just developed a keen interest in all this stuff. It’s fun,” he says. “One thing I can say is that I get up in the morning and enjoy going to work every day.”
— Diccon Hyatt
Code Tech Corporation, 9 Princess Road, Suite 9B, Lawrenceville 08648; 609-620-0290; fax, Michael Shaw, founding partner and CEO. www.codetechcorp.com.
Virginia taxes cigarets at 30 cents a pack. In New York, cigaret taxes total $5.85 a pack. It doesn’t take a criminal mastermind to see an opportunity here: you could make $1 million just by buying a truckload of smokes in Virginia and selling them in New York. Of course, doing that would be highly illegal, and that is just how Basel and Samir Ramadan ended up with millions of dollars in plastic garbage bags stashed all over their Maryland home, and the cops at their door.
Police in New York City, New Jersey, and Delaware busted the brothers’ alleged smuggling ring in May. According to news reports, the operation purchased about 20,000 cigarets a day from a wholesaler in Virginia, hid them in a storage facility in Delaware, then drove them to New York, where they were eventually sold to unsuspecting customers at Arab newsstands and grocery stores. Police say some of the profits were funneled to Palestinian terrorist groups.
This is the kind of operation that Mike Shaw is helping to stop. Shaw is the founder and president of Code Tech, a Lawrenceville-based company that uses common household inkjet cartridges to print anti-counterfeiting labels for drugs and cigarets. From his small office on Princess Road, Shaw develops and ships ink cartridges that are filled with ink that looks black to the naked eye, but shimmers with different colors under ultraviolet or infrared light.
The other innovation of Code Tech is the way the ink cartridges are used. In a household desktop printer, a print head moves the ink cartridge back and forth along a piece of paper, printing images and letters as it goes. Shaw’s company used these household print cartridges in industrial label-making machinery.
This was the focus of Shaw’s previous company, called Nutec Systems Inc. Nutec licensed the printer cartridge technology from Hewlett-Packard and developed the labeling system that is now used for special anti-counterfeiting labels. Nutec is still in business at 3175 Princeton Pike in Lawrenceville.
Shaw, who left Nutec and founded Code Tech so he could focus on anti-counterfeiting measures, found that manufacturers liked using ink cartridge technology for the same reasons that many consumers dislike them. “This became attractive to manufacturing companies because there is no maintenance associated with a sealed cartridge. You can’t work on it: it’s a self-contained disposable cartridge,” he says. The self-contained nature of the ink cartridge also allows companies to charge extremely high prices for printer ink, as anyone with a desktop printer knows all too well. However, Shaw was able to tune the efficiency of the cartridges so that each cartridge can print about 600,000 labels.
How is Code Tech able to get miles of text out of an ink cartridge when yours runs out after a few pages? It’s all about efficiency. First, a normal household printer is dormant most of the time and is shut down and restarted every time a user wants to print something. Each time a printer is booted up, it goes through a cleaning cycle that wastes tremendous amounts of ink. Manufacturers don’t have that problem since they run continuously.
Second, pictures are the biggest ink-wasting culprits, and Shaw’s system prints only text. Last, all of the labels are printed in Courier font, which, with its skinny strokes, uses about half the ink of the more common Arial.
After developing the printing system, Shaw realized he could do more with it than just printing text. “As time progressed, we realized these companies were having big problems with counterfeiting,” he says. “We developed inks that incorporate various chemical taggants that go into the cartridges. They’re covert taggants.”
As Shaw explains, the methods he uses are similar to those used by the treasury department when it prints currency. An American bill has about 20 anti-counterfeiting features. Some, like the threaded foil and color-shifting ink, are obvious to consumers. These are called “overt” security features. Others are visible only to investigators using special equipment. These are called “covert” features. Shaw’s ink is the latter.
Shaw’s two main anti-counterfeiting taggants use opposite ends of the light spectrum. The human eye can see colors within a certain spectrum. Light with wavelengths shorter than this spectrum is called “ultraviolet,” and light with longer wavelengths is called “infrared.” Shaw’s ultraviolent taggant is normally invisible to the naked eye, but emits visible, colored light when hit with UV rays. If you hit it with a common UV “blacklight,” it’s still invisible, because it uses certain frequencies not found in commercial blacklights. “It’s not a wavelength you’d find at a nightclub or Chucky Cheese,” he says.
The infrared taggants reflect light. That means you can only see them with an infrared viewer. The labels are coded with serial numbers, batch numbers or other information totaling up to 178 alphanumeric characters. The codes can be read with a common smartphone barcode reader. But if you read it with Code Tech’s special app, secret information is revealed, such as what the manufacturer’s intended distribution channel is. Someone with the Code Tech app could, for example, scan a pack of black market cigarets and tell that they had been smuggled far from their intended point of sale.
“So it has three features in one,” Shaw says. “An overt data carrier, a covert data carrier, and a taggant. That’s the uniqueness of what we’re doing here.”
Shaw was able to create this system, and the anti-counterfeiting taggants, despite not having a background in chemistry or photonics. Shaw grew up in Baltimore, where his mother was a travel agent and his father worked in packaging for a company called Signcode. He studied business administration at the University of Maryland. Shaw says he picked up his knowledge of optics through “osmosis” by spending time with Princeton professors and experts in the anti-counterfeiting field after he started his labeling company. Part of the technology used in Code Tech’s system is licensed from photonics researchers at Princeton.
Shaw says his clients prefer him not to disclose who they are. Among them are major tobacco and pharmaceutical companies. Of course, Code Tech is not the only player in the emerging anti-counterfeiting field. Shaw says his four-employee company is one of the smallest doing this kind of work, and that actually turns out to be quite an advantage. Code Tech keeps its staff small because much of the work of actually making the taggants is done by a contractor off-site in labs in Pennsylvania. Shaw says a pharmaceutical executive once told him: “The other companies that are doing this have hundreds of people who know what they’re providing. With you, there’s only three people in the world that know what you’re doing. You, me, and your chemist.”
Sometimes, being small is an advantage. Shaw says Code Tech takes in about $3 million a year. Not as much as one would make smuggling cigarets, but also not bad for a tiny staff.
He is also using his knowledge of photonics to branch out into other fields. His latest project is creating secure ink that uses the “Raman effect” for identification. Raman scattering was discovered in 1928 and has to do with the way light scatters in predictable ways off of certain molecules, in certain patterns. This effect has never been used for anti-counterfeiting, however, because it was too impractical to read the patterns.
Shaw, holding up a small handheld scanner, says the Raman effect could be used to create a very robust, if not unbreakable code. “It’s only since the miniaturization of electronics that this has been possible,” he says, holding up a handheld scanner. “Fifteen years ago, this device would have been the size of this room.”
He is also looking for other applications of optics technology. One involves adding taggants to machine oil used to lubricate manufacturing equipment. One major cigaret company is already using this to detect cigarets that have been contaminated with machine oil and automatically remove them from the production line.
Although safe cigarets may seem like something of an oxymoron, Code Tech is also at work combating fake pharmaceutical drugs. He says his technology was recently used to detect and destroy a counterfeiting ring that was putting fake cancer drugs on the market. It’s a line of work that Shaw finds very rewarding. “I just developed a keen interest in all this stuff. It’s fun,” he says. “One thing I can say is that I get up in the morning and enjoy going to work every day.”
Code Tech Corporation, 9 Princess Road, Suite 9B, Lawrenceville 08648; 609-620-0290; fax, Michael Shaw, founding partner and CEO. www.codetechcorp.com.
